Last Sunday evening, Alan and I attended the 18th Annual Hammy Awards for Habitat for Humanity. Habitat is one of Coldwell Banker’s signature charities helping build homes for qualified and motivated low income families. In the past, Ryan, Alan and I have all worked on “builds” and have also contributed financially to many of the Coldwell Banker sponsored fundraisers. Our Sierra Oaks office alone raised well over $5000. this past year and region-wise that number is in the 10’s of thousands of dollars.
Admittedly, Alan and I were invited to this prestigious event as I was to receive an award. But what we came away with that night was much more than the Golden Hammer Trophy I received.
During the ceremonies, they introduced notable guests and many devoted volunteers. And then they introduced two families that were recipients of homes this past year. Habitat actually built 8 homes in 2011. The applicants for these coveted homes are carefully screened and income qualified to be able to afford the payments and they must agree to and complete over a hundred hours of volunteer labor in the building of their new home. As testimony to the success of the organization, in the 18 years they have been placing applicants into these homes, they have not had one go into foreclosure. Huge accomplishment! Sitting at the table next to us was a single African American woman beaming proudly with her 4 children aging (am guessing) from about 5 to 15 or 16. During the 2 hour ceremony, they never made a peep sitting attentively all dressed up in their “Sunday best.” Across the room was another such family. A couple from East India who immigrated here a few years back. Life since arriving was less fruitful than they had hoped with safe housing being one of the biggest challenges. The husband gave a small speech of gratitude glowing as he described their new home and the yard which provided a safe place for his children to play. He was ever so grateful for their new home which was absolutely the answer to their prayers and their dreams; The American Dream!
After he sat down, Ken Cross, CEO of Habitat said, “now to the rest of the story”! That gentleman in his native land was an optometrist. However, he was not able to find work in his field since they migrated here. It just so happens that Rex Bennet, CEO of Vision Service Plan is on the Habitat Board of Directors. Ken made the introduction between the two and as of February 1, 2012, that man is now fully employed with VSP. The announcement brought everyone to their feet with a resounding round of applause.
I know it is all sort of corny, but I was so taken with the true love of home-ownership that filled the room that night. During the course of the years between 2002 and now, that dream has been tarnished. Where we lived went from being a home where all the important things in our lives take place and memories were made to being profit centers and piggy banks often used to pay for vacations and new cars and now to nooses around struggling families’ necks. Admittedly, many of the families who now find themselves in that upside situation, never bought a new car or vacation with the equity from their home, but were just victims of ill timing. But that night in that room, no one was focusing on foreclosures or short sales. They were celebrating the great work of a lot of people to help provide affordable safe housing to very deserving hard working families.
I, realized because I was there, I was part of that effort as well. Last summer, I received a call from Frayda Bruton who is a well-known estate and probate attorney here in town. Frayda and I have worked together for over 20 years. She asked me if I could help her liquidate a residential lot located down in the Meadowview Area. There was about $18,000 owing in back taxes and the estate needed to get rid of it. I suggested they let it go back to the City, but learned that was not an option as the beneficiary of the estate was a non-profit. So I drove down and took a look at the lot and then set about calling about half a dozen investors only to get the overwhelming response that none of them were interested; especially at that price. I conveyed that back to Frayda and she asked if they would be interested at $1.00. I went back to my investor pool to get the same response. Frayda urged me to come up with another idea. I suggested that maybe Habitat might want the lot to build on. I made more phone calls and finally connected with Ken Cross. Without hesitation, he wanted to pursue the lot. So I connected him with Frayda and that deal was put together. It turns out that the beneficiary of the lot and that estate was the Red Cross. Additionally they had two other similar properties, so all in all, it turned out to generate an donation of three properties to Habitat at no cost to the charity. This is especially significant as most the lots the charity obtains is at the cost of those back taxes. I was very happy to play a small role in helping make this happen and to establish a new partnership with Habitat and the Red Cross.
I am often asked “After 43 years, you must really love what you do??!!” My response is it is more about my passion for what I do. Sunday night it really hit home that my passion is with helping people. During the past 4 years it has been mostly focused on helping those families with the nooses around their necks. But on Sunday night, I reclaimed my passion for helping people re-identify and obtain the American Dream of Home Ownership!
We encourage you to visit the Habitat web site
http://www.shfh.org/ and see if there is a way you can help. If nothing else keep in mind that Habitat has a store, called the ReStore. It is a retail outlet where you can purchase all sorts of donated building materials, fixtures and furniture. Several major companies like Lowes and Ikea donate new items on a regular basis. All the proceeds go to fund the building of these homes. For more information you can call (916) 440-1215 ext. 1116.
If you are on the fence about buying a home, now is the time to dive back in. Prices are at rock bottom levels as are interest rates. It is time to reclaim that American Dream!
Give us a call and we will show you the way!
# posted by
Viki Benbow @ 3:18 PM
I just read this article by Liz Davison which was run in Forbes Magazine. None of the content is to be mistaken as mine! All credit for this very potent article goes to the author. I am just sharing it with my clients and friends as I think it is very important information. VikiAs a financial education company, we often see financial crises coming because employees contact us when they have financial problems or concerns they need help resolving. With the recent mortgage crisis, we began to see a major spike in calls on debt in the year leading up to the meltdown. Debt calls in 2006 increased to an all time high—representing close to half of our total calls at the time. Even worse, many callers were frantic. They weren’t looking to simply reduce their debt load; they were struggling to make ends meet. They weren’t asking about putting together a plan to pay off high interest rate debts; they were beginning to consider drastic options like foreclosure and bankruptcy.
It was rather like seeing a car crash in slow motion. You know it’s coming and you can tell the driver to slam on the brakes or swerve out of the way, but it’s too late to do much more.
Today, there’s another mortgage crisis in the works—that is, NOT having one—choosing to rent when you can afford to buy; choosing to forgo building equity in a home as a major source of retirement security—something that may be more necessary now than ever before with a soft stock market and low interest rates. This emerging crisis is not yet at the car crash stage– more at the reckless driving without a seat belt stage. There is time for Americans to resolve this one, but they must change their perspective on home ownership before it’s too late.
Why own a home when you can rent? We are hearing this question much more these days as people choose to “sit out” of the real estate market or disregard homeownership altogether after seeing many of their friends and family end up in short sales or foreclosures. Renting is the low-risk option for these callers. It’s the only way to ensure that nightmare will never happen to them.
The problem is that it will; it’s just a different nightmare. Consider this: A homeowner with a $1,500 monthly payment would still be writing the same check fifteen years later while prices everywhere increase around them. In August 2011 the Consumer Price Index included a .4% increase in rents, the biggest increase since 2008, which represents an annualized increase of 4.8%. If rents didn’t even increase that much but simply kept up with inflation at a 3.2% annual increase, a $1,500 rent payment would cost that renter nearly $900,000 over the next 30 years. The same $1,500 payment made to their mortgage would be only $540,000 (because the payments don’t increase with inflation) and of course would end with a final payment. There might even be some real equity in the property, even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement.
The renter, by contrast has no equity in their home, so in addition to almost $900,000 in rent in the above example, the renter would also be giving up $400,000 in retirement assets (and that’s at a growth rate of just 1%– far lower than even the lowest growth rate over a 30 year time period). At a time when retirement is becoming much more challenging, an extra $400,000 (or likely more) can make a major difference, not to mention the impact of NOT having to pay a mortgage. How much less would you have to save for retirement if you didn’t pay the mortgage?
And this doesn’t even include the tax benefits. The US government essentially subsidizes your house payment by allowing a mortgage interest and property tax deduction on Schedule A of the 1040. Any points you pay when you get the loan can also be deducted. Then an amazing thing happens: the IRS allows a tax exclusion on the sale of a primary residence. Owners who live in their property two out of the past five years, who have equity and sell their primary residence, receive a maximum capital gain exclusion of $250,000 (if married $500,000.) Where else can you get a tax break on an investment and then receive the proceeds tax free? I can’t think of another investment like it.
So, deciding that “renting” is safer and there’s no need to take the risk of buying a home or even waiting in an effort to time what is an unpredictable real estate market, buying only when prices have been up for a while, can be very costly. It doesn’t bring with it the emotional trauma of a foreclosure or short sale. But it is a slow drain on your finances, that over time, could compromise your ability to retire or at the very least, to retire the way you want, when you want.
All that said, I’m by no means advocating homeownership for everyone. For many, renting is the right option, at least for now. If you can’t afford to own a home, you shouldn’t even consider buying—one of the key lessons learned from the mortgage crisis. Your mortgage should be under 25-30% of your income not including bonuses or promotions and you should have an emergency fund of 3-6 months expenses in savings before you purchase a home. Also, if you don’t qualify for a reasonable interest rate on a mortgage due to credit problems, if your income is unstable, or if you crave mobility, renting is the better choice. Renting is cheaper than buying in the short term and has other advantages. Repairs: as a renter, when you turn on the shower and freezing cold water spurts out in your face, you simply make a phone call to the landlord and they have to install a new water heater instead of you footing the bill. Mobility: If you have a job opportunity or promotion in another state, you simply give notice and move. You don’t have to go through the arduous process of selling (or not being able to sell) your home. You are free from the obligations of homeownership. Property taxes: As a homeowner, even when your mortgage is paid off you still have to pay property taxes and insurance, and those costs will continue to rise.
If you are one of those people and this article has struck a cord, please give us a call. Let's talk about how today's market is different than the one that got us into this mess and how it can be used to build your future wealth and a more comfortable retirement! Viki
# posted by
Viki Benbow @ 12:10 PM
The news media in general continues to call our market a buyer’s market which sets buyers’ expectations of the market totally wrong. I have spoken with a lot of potential buyers who are in a position of investing in a rental property who are frustrated with the process. They have made offers on multiple properties only to lose out to all cash investors.
I took a listing that was a probate sale last week and felt what transpired with that property tells the real story.
The home is a 1500+ sf, 4 bedrooms, 2 bath home which needs some TLC plus a new roof. The market data indicated that with a roof, the property should command about $110,000 but with the current roof was not lendable and the price would have to be discounted to attract an all cash buyer. The estate did not want to mess with the roof and agreed to list it at an as-is all-cash price of $85,000. The property went on the market on Thursday. By Friday I had one full-priced all-cash offer which one of the parties agreed to accept. However, the court appointed administrator was not available until Monday to ratify the contract. Come Monday, there were multiple all-cash offers with the highest being $91,000 from an investor with money coming from Hong Kong. By Tuesday, we had a total of 15 all-cash offers ranging from $60,000 to a new high of $103,000. The bank accounts presented as proof of funds ranged from low six figure balances to the highest being $18,000,000.!
We did not even entertain any offers that required financing. Needless to say, there were a lot of frustrated buyers and agents whose offers were not the chosen one.
In order to get an offer accepted in this market, cash is definitely king, but even that does not guarantee you success as illustrated here. It takes writing an exceptional and relevant offer. I call the listing agent to get a handle on what the seller is looking for with regards to terms and intangibles. Do they need a few extra days to get out or a fast close of escrow. It helps to work with an agent who has a known name and good reputation.
We have been very successful in helping our investor clients successfully negotiate for some outstanding opportunities. If you are thinking about investing, we would love to put our 43 years of experience to work for you and prove, “Experience is not expensive, it is priceless!
# posted by
Viki Benbow @ 3:01 PM
In our office meeting this morning, we discussed agent safety. It is pretty common sense stuff, but it is good the remind ourselves that we are in one of the most potentially dangerous businesses because we meet people we do not know in sometimes less than safe environments on a regular basis.
One of our agents stepped forward to reiterate how important those tips are and shared with us that she was very certain she came very close to being a victim this past week. In showing a listing she set multiple appointments to meet potential buyers at a vacant home. The first group was just leaving when the 2nd party showed up. He was a rather unsavory looking man, and the first group offered to hang around for her. They did for about 10 minutes out in the front yard but then left. The minute they drove off the man closed the front door and blocked the agent’s path to leave. Unfortunately her cell phone died just minutes before, but the man did not know that. The agent moved to open the door and he made a move to stop her. She then dialed 911 on her phone and faked the call. He stepped aside and she escaped. However, she was very rattled. Coincidentally the following came across my email today. I think it is important enough to post it for everyone’s benefit.
IT IS VERY IMPORTANT INFO!! Please read and stay safe
A MESSAGE FROM THE OFFICE OF ATTORNEY GENERAL
STATE OF MICHIGAN :
Warning # 1
While driving on a rural end of the roadway on Thursday morning, I saw an
infant car seat on the side of the road with a blanket draped over it.
For whatever reason, I did not stop, even though I had all kinds of thoughts
running through my head. But when I got to my destination, I called the
Canton PD and they were going to check it out. But, this is what the Police
advised even before they went out there to check....
"There are several things to be aware of ... gangs and thieves are now
plotting different ways to get a person (mostly women) to stop their vehicle
and get out of the car.
"There is a gang initiation reported by the local Police Department where
gangs are placing a car seat by the road...with a fake baby in it....waiting
for a woman, of course, to stop and check on the abandoned baby.
"Note that the location of this car seat is usually beside a wooded or
grassy (field) area and the person -- woman -- will be dragged into the
woods, beaten and raped, and usually left for dead. If it's a man, they're
usually beaten and robbed and maybe left for dead, too.
DO NOT STOP FOR ANY REASON!!! DIAL 9-1-1 AND REPORT WHAT YOU SAW, BUT DON 'T EVEN SLOW DOWN.
"IF YOU ARE DRIVING AT NIGHT AND EGGS ARE THROWN AT YOUR WINDSHIELD, DO NOT STOP TO CHECK THE CAR, DO NOT OPERATE THE WIPER AND DO NOT SPRAY ANY WATER BECAUSE EGGS MIXED WITH WATER BECOME MILKY AND BLOCK YOUR VISION UP TO 92.5%, AND YOU ARE THEN FORCED TO STOP BESIDE THE ROAD AND BECOME A VICTIM OF THESE CRIMINALS.
THIS IS A NEW TECHNIQUE USED BY GANGS, SO PLEASE INFORM YOUR FRIENDS AND
RELATIVES.
THESE ARE DESPERATE TIMES AND THESE ARE UNSAVORY INDIVIDUALS WHO WILL TAKE DESPERATE MEASURES TO GET WHAT THEY WANT."
Please talk to your loved ones about this. This is a new tactic used. Please
be safe.
WARNING # 2
Some knew about the red light on cars, but not the 112.
It was about 1:00 p.m. in the afternoon, and Lauren was driving to visit a
friend. An UNMARKED police car pulled up behind her and put his lights on.
Lauren's parents have always told her never to pull over for an unmarked car
on the side of the road, but rather to wait until they get to a gas station,
etc.
Lauren had actually listened to her parent’s advice, and promptly called 112
on her cell phone to tell the police dispatcher that she would not pull over
right away. She proceeded to tell the dispatcher that there was an unmarked
police car with a flashing red light on his rooftop behind her. The
dispatcher checked to see if there were police cars where she was and there
weren't, and he told her to keep driving, remain calm and that he had back
up already on the way.
Ten minutes later 4 cop cars surrounded her and the unmarked car behind her.
One policeman went to her side and the others surrounded the car behind.
They pulled the guy from the car and tackled him to the ground. The man was
a convicted rapist and wanted for other crimes.
I never knew about the 112 Cell Phone feature, but especially for a woman
alone in a car, you should not pull over for an unmarked car. Apparently
police have to respect your right to keep going to a safe place.
*Speaking to a service representative at Bell Mobility confirmed that 112
was a direct link to State trooper info. So, now it's your turn to let your
friends know about 112.
You may want to send this to every woman (and man) you know; it may save a
life.
This applies to ALL 50 states
PLEASE PASS ALONG TO FRIENDS AND FAMILY, IT CAN SAVE A LIFE....
# posted by
Viki Benbow @ 12:02 PM
